Research On The Financial Strategy Of Coal Enterprises Under The Background Of Green Transformation

Coal is one of the main energy sources in the human production and life,and also occupies the main position in the energy structure of our country.Although our country’s economy has achieved rapid development since reform and opening up,the coal industry also brings problems like severe exhaustion of resources and ecological environment worsening after undergoing long-term high-intensity and extensive development.At present,the country vigorously promotes green and lowcarbon development,strictly monitors the overall policy,and gradually promotes the reform of coal production and utilization mode.The road of low-carbon,efficient and clean green development has gradually become the general trend of the coal industry.Therefore,more and more coal enterprises begin to adapt to the changes of The Times,take the initiative to assume social responsibilities,embed green development into corporate strategic goals,increase the investment in energy conservation and emission reduction transformation projects and environmental governance,and promote green transformation.However,as we all know,green transformation has a large and continuous capital demand,and its related investment often cannot bring economic benefits to enterprises in a timely and effective manner.Meanwhile,continuous investment in green transformation of equipment and mining areas will also reduce the daily production and operation efficiency of enterprises.As one of the important components of enterprise strategy,financial strategy aims to realize the reasonable allocation of limited resources through the allocation of funds,so as to promote the realization of the overall goals of the enterprise.Therefore,during the green transformation period,coal enterprises should re-examine their internal and external environment and adjust their financial strategy to help the enterprise achieve its environmental protection goals.And maintain their own financial stability.As a leading coal enterprise in China,Shenhua began to take "creating a worldclass clean energy supplier" as the strategic goal in 2014,increasing green investment,promoting green transformation,and making great achievements in green and low-carbon development,standing out in the industry.This paper intends to use a combination of theory and case study,take China Shenhua as the case study object,analyze its financial strategy choice under the background of green transformation,and try to find out how it contributes to the realization of the enterprise’s environmental protection goals and what impact it has on its business performance.Firstly,the literature and theories related to financial strategy under the background of green transformation are reviewed to lay the foundation for the following;Secondly,it introduces and analyzes the internal and external environment of China Shenhua in the green transformation period and its possible influence on the establishment of corporate financial strategy.Then it analyzes the formulation and implementation of Shenhua’s investment,financing and dividend distribution strategy in this stage.Finally,the financial performance and financial strategy matrix analysis are used to evaluate the effect of financial strategy implementation.Through the research,it is found that under the background of green transformation,Shenhua of China has made corresponding adjustments to its financial strategy according to its internal and external environment.In the investment strategy,China Shenhua increased the green-related investment and the financial asset investment with strong realization,while the investment focus of other real assets shifted to the quality and efficiency projects such as technological transformation and the power generation business with a more stable market,which improved the investment benefit and production and transportation efficiency during the green transition,and guaranteed the operation capacity and profitability of the enterprise.In the financing strategy,Shenhua mainly adopts internal financing and debt financing as auxiliary financing methods.While reducing the debt repayment risk,Shenhua ensures sufficient fund reserve and continuous cash flow during the green transformation by flexibly adjusting the debt scale and debt structure.In the dividend distribution strategy,Shenhua still adopts a relatively stable dividend payment rate to convey its still good operating conditions during the green transformation period to the outside world,so as to stabilize the stock price.On the whole,the financial strategy of China Shenhua has helped the promotion of its own green transformation strategy,avoided the possible risks of coal enterprises in the green transformation,and ensured its own financial stability.However,it is also found that China Shenhua has not grasped some external environmental opportunities,failed to save the financing cost and the dividend payment rate is too high.Finally,the paper puts forward the following suggestions on the financial strategy choice of other coal enterprises under the background of green transformation:(1)foreign investment should pay attention to green coordination;(2)Adjust the direction of investment and pay attention to investment benefits;(3)Increase external financing and control financing costs;(4)Appropriately reduce dividend distribution and increase internal retention.